{ "id": 2779179, "name": "Glenn H. Sunderland, doing business as Ambraw Finance Company, Appellant, vs. J. Edward Day, Director of Insurance, Appellee", "name_abbreviation": "Sunderland v. Day", "decision_date": "1957-09-20", "docket_number": "No. 34275", "first_page": "50", "last_page": "56", "citations": [ { "type": "official", "cite": "12 Ill. 2d 50" } ], "court": { "name_abbreviation": "Ill.", "id": 8772, "name": "Illinois Supreme Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "199 Atl. 365", "category": "reporters:state_regional", "reporter": "A.", "opinion_index": 0 }, { "cite": "89 N.H. 356", "category": "reporters:state", "reporter": "N.H.", "case_ids": [ 4435081 ], "opinion_index": 0, "case_paths": [ "/nh/89/0356-01" ] }, { "cite": "248 N.W. 607", "category": "reporters:state_regional", "reporter": "N.W.", "opinion_index": 0 }, { "cite": "263 Mich. 240", "category": "reporters:state", "reporter": "Mich.", "case_ids": [ 1857462 ], "opinion_index": 0, "case_paths": [ "/mich/263/0240-01" ] }, { "cite": "31 A.2d 485", "category": "reporters:state_regional", "reporter": "A.2d", "opinion_index": 0 }, { "cite": "130 N.J.L. 140", "category": "reporters:state", "reporter": "N.J.L.", "case_ids": [ 133167 ], "opinion_index": 0, "case_paths": [ "/njl/130/0140-01" ] }, { "cite": "43 N.E.2d 705", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "289 N.Y. 21", "category": "reporters:state", "reporter": "N.Y.", "case_ids": [ 2053976 ], "opinion_index": 0, "case_paths": [ "/ny/289/0021-01" ] }, { "cite": "175 Pac. 462", "category": "reporters:state_regional", "reporter": "P.", "opinion_index": 0 }, { "cite": "179 Cal. 98", "category": "reporters:state", "reporter": "Cal.", "case_ids": [ 1998096 ], "opinion_index": 0, "case_paths": [ "/cal/179/0098-01" ] }, { "cite": "237 S.W.2d 851", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 10214729 ], "opinion_index": 0, "case_paths": [ "/sw2d/237/0851-01" ] }, { "cite": "414 Ill. 475", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5314328 ], "pin_cites": [ { "page": "484" } ], "opinion_index": 0, "case_paths": [ "/ill/414/0475-01" ] }, { "cite": "404 Ill. 136", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5306806 ], "opinion_index": 0, "case_paths": [ "/ill/404/0136-01" ] }, { "cite": "110 Ill. 186", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5374254 ], "opinion_index": 0, "case_paths": [ "/ill/110/0186-01" ] }, { "cite": "45 Ill. 78", "category": "reporters:state", "reporter": "Ill.", "pin_cites": [ { "page": "83" } ], "opinion_index": 0 }, { "cite": "49 N.Y. 635", "category": "reporters:state", "reporter": "N.Y.", "case_ids": [ 2057555 ], "pin_cites": [ { "page": "639" } ], "opinion_index": 0, "case_paths": [ "/ny/49/0635-01" ] }, { "cite": "42 Ariz. 201", "category": "reporters:state", "reporter": "Ariz.", "case_ids": [ 5054116 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ariz/42/0201-01" ] }, { "cite": "11 Ill. App.2d 248", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5158993 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/11/0248-01" ] } ], "analysis": { "cardinality": 665, "char_count": 11502, "ocr_confidence": 0.769, "pagerank": { "raw": 9.173153215788482e-08, "percentile": 0.5089680904176267 }, "sha256": "2e00fe045b2f1b6b98130c1b3dcc1f648cfcf8a3dd5002b8cc4cf7f20e5d2f9b", "simhash": "1:5cead3ef2e5c76fc", "word_count": 1911 }, "last_updated": "2023-07-14T21:10:36.487665+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Glenn H. Sunderland, doing business as Ambraw Finance Company, Appellant, vs. J. Edward Day, Director of Insurance, Appellee." ], "opinions": [ { "text": "Mr. Justice Schaefer\ndelivered the opinion of the court:\nAs originally filed, the complaint in this case raised numerous constitutional and other questions going to the validity and the construction of the Small Loans Act and one of the regulations of the Department of Insurance under that act. In the progress of the case through the trial and Appellate courts many of the contentions once advanced have been abandoned. As the case now stands in this court, the single question is whether or not a licensee under the Small Loans Act can require a borrower to purchase credit life insurance as a condition precedent to the making of a loan.\nThe answer to this question depends primarily on the construction of the following sentence in section 13 of the Small Loans Act: \u201cIn addition to the interest herein provided for no further or other charge or amount whatsoever for any examination, service, brokerage, commission, expense, fee, insurance premium, or bonus or other thing, or otherwise, shall be directly or indirectly charged, contracted for, or received, except when a chattel mortgage is recorded, the actual recorder\u2019s fee for same may be paid by the borrower.\u201d Ill. Rev. Stat. 1955, chap. 74, par. 31.\nUnder the rule-making authority of section 21 of the act (Ill. Rev. Stat. 1955, chap. 74, par. 39) the Department has promulgated Rule 15(c) which states that \u201cNo borrower shall be required to purchase life insurance as a condition precedent to a loan * * The circuit court held this portion of the regulation invalid. The Appellate Court reversed, holding that the statute itself prohibits a licensee from requiring that the borrower buy credit life insurance as a condition to the making of a loan, and that the regulation is therefore valid. (11 Ill. App.2d 248.) We allowed leave to appeal.\nTo reverse the judgment of the Appellate Court, the plaintiff urges that the critical sentence of section 13 refers only to the money that a licensee may receive in connection with a loan, and does not \u201climit the manner in which the borrower may spend the proceeds of the loan or the charges that may be made by third parties against the borrower.\u201d He summarizes the meaning of section 13, including the sentence in question, as follows: \u201cEvery licensee may lend money and may charge the borrower, contract for with the borrower and receive thereon from the borrower interest at a rate not exceeding three per centum (3%) per month, but in addition to this interest no insurance premium or any other amount whatsoever shall be directly or indirectly charged the borrower by the licensee, contracted for with the borrower by the licensee or received from the borrower by the licensee.\u201d\nUnder this interpretation of the statute, a small loan licensee may charge the maximum rate of interest that the statute allows. He may also, as a condition precedent to making a loan, require the borrower to pay any amount whatsoever as a fee for examination, inspection or appraisal, any amount as commission or brokerage, and any attorney\u2019s fee or other expense, so long as the licensee does not himself receive the added fee or other charge. In our opinion the Appellate Court properly rejected this interpretation.\nThe sentence in question speaks from the point of view of the borrower rather than the lender. It prohibits the imposition of a \u201ccharge,\u201d which means a pecuniary burden or expense. (Webster\u2019s New International Dictionary, 2d ed.; cf. Federal Land Bank v. Warner, 42 Ariz. 201, 23 P.2d 563; Merchants Exchange Nat. Bank v. Commercial Warehouse Co. 49 N.Y. 635, 639.) It is concerned with the imposition of the burden, and not with the profit that may result from its imposition. The exception that it contains shows that its prohibition against added burdens or expenses is intended to apply to payments made to third parties. The fee for recording a chattel mortgage goes to the recorder, obviously a third party, for a service rendered by him. Nevertheless an express exception was necessary to make it permissible to impose this expense upon the borrower.\nThe plaintiff\u2019s restrictive interpretation also disregards the normal meaning of the words used in the controlling sentence of section 13. For example, any charge for \u201cbrokerage\u201d is prohibited. In ordinary usage, the term \u201cbrokerage\u201d necessarily implies a third party. \u201cA broker is an agent employed to make bargains and contracts between other persons in matters of trade, for a compensation commonly called brokerage, or, in the language of Lord Chief Justice Tindal, \u2018a broker is one who makes a bargain for another, and receives a commission for so doing.\u2019 \u201d Saladin v. Mitchell, 45 Ill. 78, 83; Braun v. City of Chicago, 110 Ill. 186; City of Chicago v. Barnett, 404 Ill. 136; Eau Claire Canning Co. v. Western Brokerage Co. 2x3 Ill. 561, 583.\nSo, too, in ordinary usage, a \u201ccommission\u201d means an amount paid to a third person. \u201cThe word \u2018commission\u2019 is defined as the recompense or reward of an agent, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. (Black\u2019s Law Dictionary, 3d ed. p. 361.)\u201d Commonwealth Life and Accident Insurance Co. v. Board of Review, 414 Ill. 475, 484.\nThe deficiencies in plaintiff\u2019s interpretation are even more apparent when we come to the prohibition against any charge for an \u201cinsurance premium.\u201d That restriction can have no application to a small loan licensee, for under article XXXI of the Insurance Code only a licensed insurance agent, broker or solicitor is permitted to solicit, negotiate for or effect policies of insurance. (Ill. Rev. Stat. 1955, chap. 73, pars. 1065.36-1065.59.) If the statute does not apply to those third parties, the prohibition of any charge for an \u201cinsurance premium\u201d is meaningless.\nPlaintiff also argues that the structure of section 13, when it is read as a whole, \u201cclearly shows that this sentence was inserted in the Act to specify what a licensee could and what he could not charge in addition to interest in making a loan.\u201d He then points out that the section specifies the maximum interest rate that a licensee can charge, and that the two sentences immediately preceding the critical one are in these terms: \u201c \u2018No licensee shall encourage, compel, or permit any borrower * * * to split up * * * any loan * * * * * \u2018No licensee shall encourage, compel, or permit any person * * * to become obligated * * * under more than one contract of loan at the same time, for the purpose or with the result of obtaining a higher rate of interest than would otherwise be permitted by this section.\u2019 \u201d We are not persuaded by this argument. So far as the structure of the section is significant, we think that the conscious shift from a series of prohibitions expressly aimed at the licensee rather sug- ' gests that the legislature did not cast the following sentence in that form because it did not intend the prohibition to apply only to the licensee.\nIn support of his interpretation of the statute, plaintiff cites the following decisions from other jurisdictions: Mills v. Parrott, 237 S.W.2d 851 (Ky.) ; Niles v. Kavanagh, 179 Cal. 98, 175 Pac. 462; Martorano v. Capital Finance Corporation, 289 N.Y. 21, 43 N.E.2d 705; Maellaro v. Madison Finance Co. of Jersey City, 130 N.J.L. 140, 31 A.2d 485; Plats v. Lapinski, 263 Mich. 240, 248 N.W. 607; Auto Owners\u2019 Finance Co., Inc. v. Coleman, 89 N.H. 356, 199 Atl. 365.) The Kentucky case involved credit life insurance, but it is otherwise dissimilar. In that case the \u201ctaking out of the insurance was not a requirement for making the loan,\u201d and the transaction with respect to the insurance took place after negotiations for the loan were completed.\nEach of the other cases involved the lender\u2019s right to require insurance upon property pledged as security for the loan, and in each of them it was held that such a requirement was not prohibited so long as the premiums were paid to a third party and the small loan licensee did not personally profit thereby. None of the statutes involved in these cases prohibited any charge on account of an \u201cinsurance premium,\u201d as does section 13. There are other statutory differences. In the California case, decided in 1918, the statute emphasized the return to the lender by its reference to a charge \u201cupon any pretext.\u201d Certainly we think that the brokerage fee to a third party that was sanctioned in that case is prohibited under our section 13. The New York case was decided by a sharply divided court, and we are impressed by the dissent, written by Chief Judge Lewis.\nWe are not concerned in this case with the pledging of a policy of life insurance that the borrower already owns as security for a loan. No charge upon the borrower is there involved. Nor are we concerned with a requirement that insurance be secured on property pledged as security. Neither practice is prohibited by the Department\u2019s regulation. There is a difference between a requirement of insurance to protect an asset that the borrower has voluntarily acquired and already owns, and a requirement that the borrower purchase a new and unwanted asset which itself becomes security for the loan. The effect of that difference upon the Department\u2019s regulation is not before us.\nBeneficial Management Corporation, amicus curiae, has drawn our attention to sections 367(7) and s6ya(e) of the Insurance Code (Ill. Rev. Stat. 1955, chap. 73, par. 979(7) and 979a(e)) as demanding a different interpretation of section 13 of the Small Loans Act. Those sections define and regulate group accident and health isurance, and blanket accident and health insurance. In 1953 they were amended to prohibit the collection of any premiums upon such insurance from borrowers under the Small Loans Act. The argument is that by these amendments the General Assembly recognized that a premium received by anyone other than a licensee for insurance required as security under the Small Loans Act is not a prohibited charge under that act. We cannot give the amendments an effect so expansive. In our opinion they show a legislative purpose to make the sanctions of the Insurance Code applicable to those who collect group or blanket accident and health insurance premiums from borrowers under the Small Loans Act. Because the General Assembly did not extend those sanctions to all types of insurance, it does not follow that the specific mention of insurance premiums is to be read out of the Small Loans Act.\nThe judgment of the Appellate Court is affirmed.\nJudgment affirmed.", "type": "majority", "author": "Mr. Justice Schaefer" } ], "attorneys": [ "Chapman and Cutler, of Chicago, and Gillespie, Burke & Gillespie, of Springfield, (RoscoE C. Nash, Hugh J. Dobbs, Frank W. Young, and William J. Hurley, of counsel,) for appellant.", "Latham CastlE, Attorney General, of Springfield, (Mark O. Roberts, and Lee D. Martin, of counsel,) for appellee.", "Gieein, Winning, Lindner & Newkirk, of Springfield, Jackson R. Collins, of New York, New York, and Edward A. Dunbar, of Morristown, New Jersey, (Montgomery S. Winning, and Edward A. Dunbar, of counsel,) for amicus curiae, Beneficial Management Corporation.", "John W. FrEELs, Roger S. Barrett, Wayne R. Cook, HubachEk & Kelly, all of Chicago, and Charles G. BrigglE, Jr., of Springfield, (Charles C. Ulrich, of counsel,) amici curiae, in support of the decision of the Appellate Court." ], "corrections": "", "head_matter": "(No. 34275.\nGlenn H. Sunderland, doing business as Ambraw Finance Company, Appellant, vs. J. Edward Day, Director of Insurance, Appellee.\nOpinion filed September 20, 1957.\nChapman and Cutler, of Chicago, and Gillespie, Burke & Gillespie, of Springfield, (RoscoE C. Nash, Hugh J. Dobbs, Frank W. Young, and William J. Hurley, of counsel,) for appellant.\nLatham CastlE, Attorney General, of Springfield, (Mark O. Roberts, and Lee D. Martin, of counsel,) for appellee.\nGieein, Winning, Lindner & Newkirk, of Springfield, Jackson R. Collins, of New York, New York, and Edward A. Dunbar, of Morristown, New Jersey, (Montgomery S. Winning, and Edward A. Dunbar, of counsel,) for amicus curiae, Beneficial Management Corporation.\nJohn W. FrEELs, Roger S. Barrett, Wayne R. Cook, HubachEk & Kelly, all of Chicago, and Charles G. BrigglE, Jr., of Springfield, (Charles C. Ulrich, of counsel,) amici curiae, in support of the decision of the Appellate Court." }, "file_name": "0050-01", "first_page_order": 52, "last_page_order": 58 }